“Stop Pissing About!” – The High Court clarifies the scope of employment in determining vicarious liability

In the recent decision of CCIG Investments Pty Ltd v Schokman [2023] HCA 21, the High Court of Australia (High Court) unanimously overturned a decision of the Queensland Court of Appeal, finding that an employer was not vicariously liable for the conduct of an employee who urinated on a sleeping colleague in their shared accommodation.

The concept of ‘vicarious liability’ will hold an employer, whose business the employee is acting on behalf of, responsible for any harm caused by the employee’s actions. Vicarious liability may attach to an employer if the employee’s wrongful act was performed in the ‘course or scope of employment’. The High Court clarified this concept in this case.

Facts

Mr Schokman and Mr Hewett were both employees of CCIG Investments Pty Ltd (CCIG), who were required under their employment contracts to live in shared accommodation supplied by CCIG.

In the early hours of the morning, Mr Schokman was woken in a distressed state and was unable to breathe. Mr Hewett, in a drunk and disoriented state, was urinating on him. Mr Schokman had a history of cataplexy, a condition causing a total loss of voluntary muscle control triggered by emotional distress, and narcolepsy, which were well managed. The incident exacerbated Mr Schokman’s medical conditions, leaving him with post-traumatic stress disorder, and an adjustment disorder.

Mr Schokman sued CCIG for damages on the basis that they breached their duty of care owed to him as an employee, or alternatively, was vicariously liable for the negligent act of Mr Hewett. The claim for direct negligence failed. To determine if there was vicarious liability, the issue before the Queensland Supreme Court was whether Mr Hewett’s actions constituted a wrongful act committed ‘in the course or scope of his employment’.

The decision at trial

The trial judge of the Queensland Supreme Court dismissed Mr Schokman’s claim on the following bases:

• There were no previous incidents of Mr Hewett becoming intoxicated, and no evidence that would put imply a duty on CCIG to take pre-emptive measures to mitigate any risk; and
• Although it was accepted that the incident arose out of the requirement of shared accommodation, there was no ‘connection or nexus between the employment enterprise and the wrong’ committed by Mr Hewett to impose vicarious liability on CCIG.

The Queensland Court of Appeal

The Queensland Court of Appeal allowed Mr Schokman’s appeal, finding that it was a necessary requirement of Mr Schokman’s employment to share the room with Mr Hewett. Given it was a term of Mr Hewett’s employment, the Court of Appeal determined that this fell within the scope of employment to trigger vicarious liability.

The High Court’s decision

The High Court unanimously reinstated the primary judge’s decision, finding that CCIG was not liable for Mr Hewett’s actions. There was nothing about Mr Hewett’s conduct leading to the incident that was authorised, required or incidental to his employment.

In reaching its decision, the High Court had regard to the indicia discussed in Bugge v Brown[1] and Prince Alfred College Inc v ADC[2] (Prince Alfred College) in establishing the employment conditions required to make a finding of vicarious liability. The connection will be tenuous if the employee’s actions are far removed from their responsibilities to the extent that the action is completely unrelated and not associated with the job scope.

The Prince Alfred College argument

The Prince Alfred College case involved the act of sexual abuse of a child in school. The critical issue was whether the abuser’s role as a housemaster placed him a position of ‘power and intimacy’ that the performance of his role could be said to have given not only the opportunity but occasion to commit the wrongful acts, ‘such that they could be said to have been committed in the course or scope of the employment’.

In the present circumstances, the High Court determined that the most that could be said to arise from the circumstances of shared accommodation was that it ‘created physical proximity between the two employees’, which was merely ancillary to the requirement of the job. It did not give rise to any special relationship of intimacy and trust, and as such, did not provide a strong enough connection with Mr Hewett’s employment to establish vicarious liability.

The Bugge v Brown argument

In Bugge v Brown, an employee lit a fire to cook his meal. The fire spread and caused damage to neighbouring properties, and the employer was held to be vicariously liable. The Court in that case held that the act of lighting the fire itself occurred whilst the employee was carrying out his work.

By contrast, Mr Hewett could only be said to be ‘acting in accordance with his employment contract by sharing the accommodation provided for and being present in it’. Nothing on the evidence pointed to the drunken act of Mr Hewett being authorised, required or incidental to his employment – it was not performed during his hours of work, or at the place he worked. In fact, it was not incumbent on CCIG to be present or monitor Mr Hewett’s actions during leisure time or even in his personal accommodation.

The High Court determined that the functional, geographical and temporal aspects of Mr Hewett’s course or scope of employment were absent, concluding that the circumstances in Bugge v Brown were in no way analogous to the present facts. Therefore, Mr Hewett’s act of negligent urination was not so closely connected with Mr Hewett’s employment duties that the act could be said to have occurred in the course of his employment.

Take Home Messages

The High Court’s judgment provides helpful guidance in identifying circumstances where an employer may be held vicariously liable for the actions of an employee. There will be a particular focus on the central act giving rise to the harm, which will be considered in connection to the employee’s role and their scope of employment.

Employers should take a considered approach to their duty of care, especially when providing accommodation, requiring employees to travel for work, or when encouraging employees to attend activities outside of ordinary hours of work. Clearly setting and establishing expectations, ensuring that employment contracts and workplace policies adequately identify duties that fall within or outside the scope of employment are equally important.

Employers must be aware of their duty of care and work health and safety obligations to provide a safe workplace, as it may well give rise to liability for any negligence on the part of an employee failing to adhere to those obligations.

For more specific information or advice on any of the material contained in this article please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Thomas Tagirara on +61 8 8217 1337 or ttagirara@normans.com.au or Li-shern Sim on +61 8 8217 1362 or lsim@normans.com.au.

[1] (1919) 26 CLR 110.

[2] (2016) 258 CLR 134.